Oil prices rise to reverse earlier losses

LONDON: World oil prices rose Monday, reversing earlier losses, with focus on the United States where refineries were on strike.

US benchmark West Texas Intermediate for delivery in March climbed 26 cents to $48.50 a barrel.

Brent North Sea crude for March gained 60 cents to stand at $53.59 a barrel in afternoon deals compared with Friday's close.

Analysts said dealers earlier took profits after WTI had Friday rebounded from six-year lows to rocket $3.71 and Brent had surged $3.46.

Supporting the market has been a series of announcements by oil companies that they plan to cut investment amid lower returns for crude brought to the surface.

Meanwhile the biggest strike at US refineries since 1980 was set to add to the world's oversupply of oil, weighing once more on prices, according to analysts.

The refineries on strike can together produce 1.82 million barrels of fuel per day, about 10 per cent of US capacity.

The United Steelworkers union, which represents employees at more than 200 US refineries, terminals, pipelines and chemical plants, stopped work on Sunday at nine sites after failing to agree on a labour contract.

Despite firmer prices Monday, the oil market has lost more than half its value since June when the commodity was sitting at more than $100 a barrel, largely owing to a surge in global reserves boosted by robust US shale oil production.

The problem was exacerbated in November after the OPEC oil cartel insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30 percent of global crude.